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Europe feels the pressure when technology competition heats up between the United States and China

BRUSSELS – The European Union lacks its own powerful technology sector and has instead tried to carve out a space in the digital economy as the world’s regulatory superpower, and has led the tax on privacy rights and data protection by exploiting its huge internal market against Goliath like Google and Facebook .

But a number of recent examples have made it clear that this is increasingly not enough for Europe. The rapid pace of technological change – including artificial intelligence and face recognition – is increasingly mixed with concerns about national security that European leaders have lost understanding and response to, analysts say.

As global technology turns into a battlefield between China and the United States, Europe is finding it harder to set rules while others in Beijing and Washington sit in the diving seat.

“Europe must work together,” said Marietje Schaake, International Policy Director at the Stanford University Cyber ​​Policy Center and former Member of the European Parliament. “I’m worried the pace is too slow for the pace as the changes come.”

The latest example is TikTok, the very popular Chinese short video app, which the Trump administration has challenged by using many of the same national security arguments they used against Huawei, the Chinese telecommunications giant, and its attempt to become the world’s dominant 5G supplier. .

Time and time again, such disputes have put European leaders, regulators and industries under pressure between Beijing and Washington, and risk retaliation against carmakers, finance companies or agricultural companies if they choose one side over the other.

In response, European leaders have recently launched a generational project against “digital sovereignty”, mixing tougher rules against foreign technology companies with efforts to increase local innovation.

Margrethe Vestager, Vice President of the European Commission responsible for digital issues, has called it a “new phase” for technology policy in the region.

But this policy will take years to shift the balance meaningfully in Europe’s favor, analysts say, and many question whether they are really enough to close the technology gap with the United States and China.

One of the reasons why Brussels risks falling behind is that security is still the responsibility of the individual member states, not one given to the EU, said Mrs Schaake.

“TikTok confronts Europe with the weaknesses of its digital and national security policies,” she said. “Europe is naive about certain technologies that come from China and the United States, and only says that everyone who does business in Europe must respect our rights and regulations.”

After months of debate, some European leaders are coming around to take a closer look at those held in Washington, where President Trump has moved to try to force the sale of TikTok’s US operations to a US company, aiming for the company’s Chinese band to present a national Safety. threat.

It has used the same argument against Huawei, the telecommunications giant, although both companies deny any explicit link to the Chinese government.

In Europe, the US view of Huawei, backed by the threat of secondary sanctions, has gained ground, most recently in the UK, where a ban was passed in July.

But most Europeans still see TikTok not as a security threat, but as a risk to privacy. Even if the White House TikTok sales are orchestrated, European operations will remain under the ownership of Chinese parent company ByteDance.

TikTok uses both face recognition and artificial intelligence, important technologies that are not regulated by the US or the EU. “With the combination of competition, artificial intelligence and security, it makes sense why some policy makers are concerned,” said Andreas Aktoudianakis, a digital policy analyst at the European Policy Center, a research institution in Brussels.

“Europe wants to regulate artificial intelligence and other technologies, but it is slow and there is no real timeline,” he added. “We’m late to catch the train.”

Gerard de Graaf, director of the European Commission’s digital single market, said the EU needed “much more co-operation between member states on the security issue.”

Europe has no major social media platforms, he admitted at a seminar in Bruegel, a research institution in Brussels, but is doing well in financial technology, robotics and 5G. “It is not the case that the EU is far behind everyone else,” he said, “but we have challenges.”

But Francesca Bria, chair of the Italian National Innovation Fund, claimed that Europe risked being squeezed between the Chinese state model – represented by Huawei, WeChat, Alibaba, Tencent and TikTok, with their government subsidies – and the “big company, big tech surveillance ”of the American giants.

“If we fail to regain digital sovereignty,” she said, “we risk becoming a colony trapped between the United States and China,” at the risk of democracy.

US tech stocks alone are more valuable than the entire European stock market, Bria said. “Europe must remain relevant as a global economic power, not just a regulatory power,” she said.

The weaknesses are strong. The world’s most popular smartphones are made in China, South Korea and the United States. The largest social media and online shopping platforms come from US and Chinese companies, as do the largest providers of cloud computing and artificial intelligence.

Europe has been missing from the list of the world’s most influential technology companies since the fall of Nokia about a decade ago. For reasons such as lack of venture capital, language barriers and a cultural aversion to risk, European companies have struggled to match the entrepreneurial pace of a technology industry now dominated by mobile devices, Internet services and online communication tools.

Europe has sought to influence the digital economy through regulation, adopting tough data protection rules and aggressively enforcing antitrust laws.

But European leaders are realizing the limits of this effort, especially as citizens depend on Amazon, Apple, Facebook and Google in the absence of European alternatives. The largest European technology company is Germany’s SAP, a software provider that competes with US companies such as Microsoft and Oracle.

In addition to privacy and security issues, TikTok also raises questions about misinformation and censorship that the company exercises in matters of sensitivity to China. The European Data Protection Board said in June that it would set up a working group to assess TikTok’s activities across the block.

But it is not clear which European agency will take the lead, especially since TikTok moved its data protection functions to Dublin in July. It can oversee the Irish Privacy Commission on privacy issues. But the agency has previously experienced criticism for not being more aggressive.

Noah Barkin, a senior visiting fellow at the German Marshall Fund, said that Europe’s lack of influence ultimately stemmed from the lack of influential technology companies. Europe will face these difficulties for years while China and the United States fight for technical superiority.

“Europe has not developed its own global digital companies to compete with the major US and Chinese companies, and ultimately it’s about digital sovereignty,” Barkin said. “It can not just be a regulator.”

Europe’s plans for “digital sovereignty” remain vague, said Rebecca Arcesati, an analyst at the Mercator Institute for China Studies in Berlin.

“This is a talking point, but it is a long time before Europe can develop its own digital masters,” she said. “It may be too late.”

Fabrice Pothier, strategy director at Rasmussen Global consulting company in Brussels, said that American pressure forced Europe to calibrate relations with China, especially in technology matters.

“It’s a wake-up call for Europe,” he said. “There is no such thing as benign technology and network operator from China.”

In this case, the Trump administration is “not necessarily wrong,” he said. “Europe is generally behind the curve.”

Steven Erlanger reported from Brussels, and Adam Satariano from London. Monika Pronczuk contributed research from Brussels.

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